Tuesday, May 01, 2012

I would walk through the door that the Minnesota Republican leadership opened with their decision to propose using general obligation bonds to pay for the state share of a Vikings stadium. The offer made today could become the vehicle for a global agreement to end the session. This might be the best time to strike the hardest bargain with the Vikings and get the best possible deal, as well as get the best possible bonding bill.

It is surprising, to say the least, that the same House Republicans allergic to a bonding bill are now offering to bond $250 million to $300 million in stadium expenses. Tactically, it's a horrible blunder. In some ways, it's like last year's Republican mention of tobacco bonds and the school shift, which provided the revenue needed to bridge the budget gap. Like last year, Dayton can "accept their offer" to bond for the stadium and drive a better bargain for the state.

Demand more from the Vikings: There should be some user taxes in this deal. While an 18% of revenue user fee plan is unacceptable to the Vikings, a smaller percentage might be available. Don't take the team off the hook now, they want a deal. At a minimum, luxury suite taxes and a share of the sale of personal seat licenses. You can probably squeeze at least another $40-70 million out of the Vikings. Accept the Republican premise that the team is responsible for cost overruns (as the Twins deal did.) Demand at least the same share of the profits if the team is sold as the Twins stadium deal.

You can make both parties look like heroes who drove a hard bargain for Minnesota if this all works out. Hopefully, you'll be able to get enough of a concession from the Vikings that the Republicans can declare victory that they limited the state cost to "infrastructure."

Get a reasonable bonding bill: Offer to bond for $1.1 billion, including $330 million for the Vikings, $220 million for the Capitol and $550 million in other projects. We can afford it. And Republicans can claim the legacy of saving the Capitol from decay.

When you announce your offer, make sure to pick all of those "heavy equipment" projects that Kurt Zellers talked about today. The Southwest LRT has to be in there, as well as the civic centers in St. Cloud and Mankato. Remember, you're coming down over $200 million from your initial bonding proposal. Now that the Republicans have gotten over their debt allergy, let's make a deal.

Mark Dayton has been a "big infrastructure" Governor, and if he pulls this off, he could claim over $2.2 billion in building projects in his first two years, including the Stillwater bridge.

Give in on their tax bill: Many of the worst provisions have been removed and it's of manageable size. Demand some revenue in return, so we're not just draining the budget reserve, perhaps the internet sales tax which has bipartisan support. But besides that, they get their tax bill. It passed the House today, but hasn't been approved by the Senate yet.

This basic framework for a global agreement is made possible by the Republican's clumsy attempt to kill the stadium Tuesday afternoon. Business and labor would both support this compromise, and it would burnish the centrist credentials of both Dayton and Republicans. Republicans desperately need to be able to claim some victory from this session.

There would be opposition from the right and the left, but you might be able to get to 81 in the House with the significant support that removing gambling and increasing bonding would create in the DFL caucus. And with some Vikings concessions, still more could vote for it, declaring victory.

General obligation bonds are the most stable source of revenue possible for this project. Removing the gambling issue for the Republicans is a plus, and general obligation bonds don't need a backup revenue source. The "roof-ready" part of this proposal is a canard. Eliminating a roof only saves $100 million. I can't imagine a roof on the stadium is the crucial issue for the Republicans, it's the money.

So, why not swing for the fences? The negotiations aren't working, so go back to what worked last time. Accept the revenue source the Republicans are offering and then work on the details.